Belt and Road

Belt and Road provides exporters with a brief analysis of political and economic risks for the countries under the Belt and Road Initiative.


Key Information

Capital

Astana

Population

18.0 million

Area

2,724,900 sq km

Currency

Kazakhstani Tenge (1 KZT = 0.003 USD as of 16 January 2018)

Official language(s)

Kazakh, Russian

Form of government

Presidential republic

Ease of doing business by World Bank

# 36 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 57 out of 137 in 2017/18 (4)

Logistics Performance Index by World Bank

# 77 out of 160 in 2016

Major merchandise exports (% of total, 2016*)

Major merchandise imports (% of total, 2016*)

Mineral products (70.5%)

Machinery & equipment (49.2%)

Metals (16.0%)

Chemicals (16.5%)

Chemicals (6.0%)

Metals (13.7%)

Top three export countries (% of total, 2016*)

Top three import countries (% of total, 2016*)

Italy (20.3%)

Russia (36.0%)

China (11.5%)

China (14.4%)

Russia (9.6%)

Germany (5.7%)

* Most recent year for which data are available

Source: Economist Intelligence Unit

Political Highlights

 

Kazakhstan is the ninth largest country in the world by land area. It declared independence following the collapse of the Soviet Union in 1991. Nursultan Nazarbayev has been the president since the country’s independence, as the constitution allows him to seek re-election for unlimited times. Although constitutional reforms adopted in June 2017 have formally devolved some powers to parliament, genuine political opposition has been marginalized, and this situation is unlikely to change as long as Nazarbayev remains in office. The authorities have launched the 100 Concrete Steps and 3rd Modernization Initiative. These comprehensive initiatives aim to improve public administration, the business environment, competitiveness; and reduce commodity dependence. However, as Nazarbayev is turning 78 years old soon, the apparent lack of a succession plan has fueled uncertainty over the future direction of government policy.

The Kazakhs make up nearly two thirds of the population, while ethnic Russians account for a quarter and smaller minorities the rest. Islam is the religion of about 70% of the population. Kazakhstan adopts a multi-vector foreign policy, retaining good relations with the West, China, Russia and the Islamic world. Avoiding excessive dependence on any single country or bloc and diversifying trade and investment links will remain a keystone of foreign policy. Kazakhstan has participated in China’sBelt and Road Initiative” and is a member state of the Russia-backed Eurasian Economic Union.

Economic Trend

* Estimates ^Forecasts

Source: Economist Intelligence Unit

 

Kazakhstan, the largest economy in Central Asia, possesses vast natural resources including oil and other minerals and metals. External demand from China and Russia, the country’s major trading partners, and global oil demand and prices, are the key factors impacting Kazakhstan’s economy. Unsurprisingly, low oil prices in the past few years had negative implications for both domestic consumption and investor confidence. The move to a floating exchange-rate regime in 2015 led to a sharp depreciation of the Kazakhstani tenge against the US dollar. After two years of low growth, real GDP growth finally rebounded in 2017 thanks to the partial recovery of oil prices as well as the commissioning of the long-awaited off-shore oil field Kashagan.

The sharp exchange rate depreciation in late 2015-early 2016 triggered a surge in consumer prices, but inflation has come down gradually as the pass-through effect faded out. Lower inflationary pressure has allowed the central bank to pursue a more accommodative policy stance. In January 2018, the bank lowered its benchmark interest rate by 0.5% to 9.75%, the first rate cut in five months. Fiscal policy in recent years has been largely supportive, mainly through the authorities’ “Nurly Zhol” initiative, which has provided funding to infrastructure, small and medium enterprises, and housing. Together with fiscal transfers to the financial sector, budget deficit widened to 2.4% of GDP in 2017. However, fiscal policy is likely to be less favorable going forward, as the authorities move to shore up public finances.

For 2018, economic growth is expected to continue at a moderate pace, benefiting from structural reforms, enhanced regional cooperation and the recovery of Russia’s economy. Oil exports are projected to increase as the Kashagan oil field becomes fully operational. Kazakhstan has a growing labour force and considerable catch-up potential, but weak development in industrial sectors and substantial distances to global markets are significant constraints to growth prospect. As the economy remains vulnerable to commodity price swings, the longer-term development policy challenge is to transform the country’s growth model away from reliance on natural resource extraction toward a more diversified economy.

 

Hong Kong – Kazakhstan Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Kazakhstan increased by 13.6% from HK$487 million in 2015 to HK$553 million in 2016. The top three export categories to Kazakhstan were: (1) telecommunications, audio & video equipment (+21.2%), (2) office machines & computers (+14.4%), and (3) electrical machinery, apparatus & appliances, & parts (-12.6%), which represented 83.8% of total exports to Kazakhstan.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Kazakhstani buyers. For 2017, the number and amount of credit limit applications decreased by 50.0% and 73.6% respectively. In the past 12 months (from January 2017 to December 2017), there was no insured business on Kazakhstan.

 

Please click here to download the charts (PDF format).

 

Last update: 17 January 2018



Key Information

Capital

Tallinn

Population

1.3 million

Area

45,228 sq km

Currency

Euro (1 EUR = 1.2042 USD as of 12 January 2018)

Official language

Estonian

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 12 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 29 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 38 out of 160 in 2016

Major merchandise exports (% of total, 2016*)

Major merchandise imports (% of total, 2016*)

Machinery & equipment (29.4%)

Machinery & equipment (27.5%)

Timber products (13.0%)

Chemicals (13.5%)

Foodstuffs (9.1%)

Foodstuffs (10.4%)

Top three export countries (% of total, 2016*)

Top three import countries (% of total, 2016*)

Sweden (17.9%)

Finland (13.0%)

Finland (16.0%)

Germany (11.0%)

Latvia (9.2%)

Lithuania (9.0%)

* Most recent year for which data are available

Source: Economist Intelligence Unit

Political Highlights

 

Estonia regained independence from the former Soviet Union in 1991. It is one of the Baltic states, along with Latvia and Lithuania, and is one of the least populous member states of the European Union (EU). It has a large Russian-speaking minority (the ethnic Russian accounts around one-fourths of the total population). Juri Ratas, leader of the Centre Party, a center-left, traditionally pro-Russian party, was elected prime minister in 2016. His party formed a left-leaning coalition government with two parties: the Social Democratic Party (SDE) and the conservative Pro Patria-Res Publica Union (IRL).

Successive governments have pursued a free market, pro-business economic agenda, and sound fiscal policies. The current coalition government's policy objectives include a shift to a more pro-growth stance than that of the previous government. It also plans to focus on improving welfare distribution.

Estonia joined North Atlantic Treaty Organization (NATO), a US-led military alliance in 2004. Enhancing national security remains at the top of foreign policy agenda for the government, in a region worried about possible Russian aggression. Since Donald Trump’s US election victory, concerns in the Baltics and wider Eastern Europe about Russian expansionist ambitions have become more acute because of the perception that Trump might not be fully committed to their defense. 

Economic Trend

* Estimates ^ Forecast

Source: Economist Intelligence Unit

Estonia is a market-based economy with an attractive business environment. In 2014, it became the world’s first country to issue “E-Residency” status to noncitizens, which makes it easier to do business in Estonia. Estonia is called an e-State, for its emergence as one of the most technology-advanced countries in the world. The economy benefits from strong information and communications technology (ICT) sector and close trade ties with Finland, Sweden, Germany, and Russia.

Estonia has one of the strongest public finances in Europe, but as a small and open economy, the country is vulnerable to external shocks. The near-term outlook for Estonia is broadly positive, as the external environment improves and government’s pro-growth policies come to fruition. Economic growth is projected at 3.4% for 2018 and 3.6% for 2019, supported by continued robust consumption and higher investment and exports. However, the working-age population is likely to shrink due to demographics, putting a continuous upward pressure on wages and pulling down the country's potential rate of growth.

The country has a relatively well-developed transportation infrastructure. It participates in the international transport project “Rail Baltica” which aims at integrating the Baltic States in the European rail network. The project, which is expected to be completed in 2026, includes five EU countries – Poland, Lithuania, Latvia, Estonia and Finland. With its well-developed transport and logistics sectors, Estonia can play an important role in promoting trade between Europe and Asia.

 

Hong Kong – Estonia Trade

 

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Estonia decreased by 0.2% from HK$896 million in 2015 to HK$894 million in 2016. The top three export categories to Estonia were: (1) electrical machinery, apparatus & appliances, & parts (-28.4%), (2) clothing & clothing accessories (+101.9%), and (3) telecommunications, audio & video equipment (+20.4%), which represented 76.3% of total exports to Estonia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Estonian buyers. Currently, the insured buyers in Estonia are mainly small and medium-sized companies. For 2017, the number of and the amount of credit limit applications on Estonia decreased by 7.1% and 46.6% respectively. Insured business decreased by 7.8%. Major insured products were electronics, toys and clothing, which represented 64.9% of ECIC’s insured business on Estonia. The Corporation’s underwriting experience on Estonia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (January 2017 to December 2017).

 

 

 

Please click here to download the charts (PDF format).

 

Last update: 12 January 2018


 

Key Information

Capital

Moscow

Population

147.0 million

Area

17,098,242 sq km

Currency

Russian ruble (1 RUB = 0.0176 USD as of 10 January 2018)

Official language

Russian

Form of government

Republic

Ease of doing business by World Bank

# 35 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 38 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 99 out of 160 in 2016

Major merchandise exports (% of total, 2016*)

Major merchandise imports (% of total, 2016*)

Oil, fuel & gas (59.1%)

Machinery & equipment (47.3%)

Metals (13.3%)

Chemicals (18.5%)

Machinery & equipment (8.5%)

Food & agricultural products (13.7%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

Netherlands (10.3%)

China (21.1%)

China (9.5%)

Germany (10.6%)

Germany (7.4%)

USA (6.1%)

* Most recent year for which data are available

Source: Economist Intelligence Unit

Political Highlights

 

Vladimir Putin has been Russia's dominant political figure since his election as president in 2000, serving two terms and then a four-year stint as prime minister, before resuming the presidency in 2012. He seeks to enhance the country’s geopolitical influence and reassert Russia as a world power. The next presidential election will take place in March 2018. With little real competition, it is expected that Putin will win the election and remain as Russian leader by the end of his term in 2024.

Tensions with the West have driven an upsurge in nationalist and anti-West sentiment in the country, while the government’s economic policy has grown more protectionist. The US and the European Union (EU) is currently imposing sanctions on Russia including asset freeze, travel bans, arms embargo and restrictions on access to capital markets targeting Russia's banking, oil and defense sectors. In response, Russia bans a wide range of food imports from the US, the EU, Australia, Canada and Norway, among others. Tensions with the West are likely to remain in the near future.

As the economy has been hit by the relatively low oil prices and international sanctions, Russia is pinning its hopes on the East and initiating its own Asian pivot, in order to look for new partners and growth opportunities. It signed a 30-year, US$400 billion deal with China to supply natural gas from eastern Russia to northeast China. It is also seeking to market its weapons and military equipment as well as expertise in the energy sector.

Economic Trend

* Estimates  ^ Forecasts

Source: Economist Intelligence Unit

Russia is a major exporter of crude oil, petroleum products, and natural gas. Sales of these fuels account for 60% of Russia's total export revenue and the hydrocarbon sector contributed to half of the federal budget revenue. The country's reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the fluctuations in global prices. A combination of low oil prices and western sanctions pushed Russia into recession in 2015 and 2016, while the ruble has depreciated by roughly 40% against the US dollar since the beginning of 2014.

Currently, the sanctions imposed by the West are mainly targeted to block deals and cut business ties with key sectors of the Russian economy. In particular, the US and EU sanctions prohibit their citizens or companies from providing new financing to major state-owned Russian banks and energy companies with a maturing exceeding 30 days. However, the restrictions by the West are partial, and do not disrupt Russia’s main business: the sale of natural gas and oil.

Russia’s international reserves were still large, equivalent to nearly 17 months of imports at the end of 2017. Current account surpluses, a flexible exchange rate regime and the injection of liquidity into the banking system also cushioned the shocks. After a two-year recession, the Russian economy has rebounded, supported by a partial recovery of oil prices. Nevertheless, economic growth is likely to remain low in the short term, on the back of enduring sanctions, fiscal consolidation and relatively low oil prices.

Hong Kong – Russia Trade

 

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Russia increased by 22.4% from HK$12,816 million in 2015 to HK$15,685 million in 2016. The top three export categories to Russia were: (1) telecommunications, audio & video equipment (+32.8%), (2) office machines & computers (+33.7%), and (3) electrical machinery, apparatus & appliances, & parts (+36.4%), which represented 84.4% of total exports to Russia.

 

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Russian buyers. Currently, the insured buyers in Russia range from small and medium sized companies to large scale retail groups. For 2017, the number and the amount of credit limit applications on Russia decreased by 1.3% and increased by 54.5% respectively, and the insured business decreased by 19.4%. Major insured products were electrical appliances, electronics and metallic products, which represented 65.8% of ECIC’s insured business on Russia. The Corporation’s underwriting experience on Russia has been satisfactory, with no payment difficulty case and one claim case reported in the past 12 months (from January 2017 to December 2017), involving electrical appliances.

 

Please click here to download the charts (PDF format)

 

Last update: 10 January 2018


 

Key Information

Capital

Damascus

Population

18.4 million

Area

185,180 sq km

Currency

Syrian Pound (1 SYP = 0.0019 USD as of 3 January 2018)

Official language(s)

Arabic

Form of government

Presidential republic

Ease of doing business by World Bank

# 174 out of 190 in 2018

Logistics Performance Index by World Bank

# 160 out of 160 in 2016

Source: Economist Intelligence Unit

Political Highlights

 

While Sunni Muslims make up around 70% of the country’s population, political power has long been held by the minority Alawi community (an offshoot of Shia Islam). In power since succeeding his father in 2000, President Bashar al-Assad is fighting for control of his country after protests against his rule turned into a civil war in 2011, between the regime and various secular and Islamist opposition groups in different parts of the country. The war has also involved regional and international powers.

The war has continued to take a heavy toll on the Syrian society and on the economy, with destruction of public services and infrastructure. Despite international efforts to end the civil war, a comprehensive peace deal is likely to remain elusive. Faced with severely diminished resources and ongoing international sanctions, the regime will remain reliant on financial support from Iran and Russia.

Economic Trend

* Estimates ^Forecasts

Source: Economist Intelligence Unit (only data from 2017 is available)

 

Syria's economy continues to suffer from the ongoing civil war, contracting by more than 70% from 2010 to 2016. Output losses are particularly concentrated in the oil, manufacturing, transportation, and construction sectors. The government has struggled to address the effects of international sanctions, widespread infrastructure destruction, diminished domestic consumption and production, and high inflation.

The government currently publishes very few economic data. According to the World Bank, the current account deficit was estimated to have reached 28% of GDP in 2016. It was increasingly financed by withdrawing foreign exchange reserves, which declined from nearly US$21 billion in 2010 to less than US$1 billion in 2015. In the meantime, gross public debt rose from 30% of GDP in 2010 to 150% of GDP in 2015.

Syria’s economic prospects hinge on containing the war and finding a political resolution to the conflict. The longer the conflict continues, the more difficult the post-conflict recovery will be. The World Bank warned that even if political situation stabilized, Syria would have to grapple with immediate economic challenges, such as the return of refugees and the reconstruction of infrastructure.

Hong Kong – Syria Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Syria decreased by 60.1% from HK$27 million in 2015 to HK$11 million in 2016. The top three export categories to Syria were: (1) electrical machinery, apparatus & appliances, & parts, (2) professional, scientific & controlling instruments/apparatus, and (3) plastics in primary forms, which represented 91.2% of total exports to Syria.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) currently does not provide cover on Syrian buyers. In the past 12 months (from January 2017 to December 2017), there was no insured business on Syria.

 

 

Please click here to download the charts (PDF format).

 

Last update: 4 January 2018



Key Information

Capital

Sofia

Population

7.4 million

Area

110,879 sq km

Currency

Bulgarian Lev (pegged to euro at 1.96 BGN = 1 EUR)

Official language

Bulgarian

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 50 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 49 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 72 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (55.8%)

Manufactured goods (63.0%)

Fuels and mining products (24.4%)

Fuels and mining products (24.3%)

Agricultural products (17.3%)

Agricultural products (11.1%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (66.8%)

European Union (66.1%)

Turkey (8.0%)

Russia (8.9%)

Serbia (1.9%)

Turkey (6.2%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Bulgaria ended the communist regime in 1989 and adopted parliamentary democracy based on the revised constitution of 1991. The resignation of the government led by centre-right Citizens for European Development of Bulgaria (CEDB) in November 2016 had triggered a period of political instability. The CEDB came first in a snap parliamentary election and then it formed a new government with United Patriots (UP), an alliance of three nationalist parties, in May. Party leader Boiko Borisov returned as prime minister for the third time since 2009. Although the formation of a new government has ushered in a period of greater stability, policy differences between coalition partners might undermine the government.

Bulgaria joined the European Union (EU) in 2007. The EU has continued to demand Bulgaria to step-up the implementation of judicial reforms and put greater efforts in combating corruption and organized crime. In the meantime, migrant flows are an issue as Bulgaria is one of the main transit points for the more than a million migrants who have entered Europe from the Middle East and North Africa. In an attempt to prevent illegal crossings, the country built a fence on its border with Turkey and reinforced its border controls.

Economic Trend

* Estimates  ^ Forecasts

Source: Economist Intelligence Unit

 

Following the end of the communist rule, Bulgaria has moved from a highly centralized and planned economy to a market-based one, with tourism, information technology and telecommunications, agriculture, pharmaceuticals, and textiles being leading sectors. However, Bulgaria’s economic convergence to average EU income levels is slow -- GDP per capita is only 49% of the EU average, the lowest in the Union.

Real GDP is projected to grow by 3.8% in 2017 and 3.4% in 2018, mostly driven by domestic demand. Private consumption growth is set to moderate, while investment should continue to boost the economy as the absorption of EU funds under the 2014-2020 EU programming period is expected to accelerate.

Over the past decade Bulgaria has been actively developing as one of the leading global destinations for outsourcing, in particular the IT and customer service sectors, owing to its geographical location in the centre of southeastern Europe, abundant supply of low costs and multilingual workers, and a favourable tax policy. Currently, Bulgaria is not a member of the euro area, and there is no target date for the country to join the currency bloc. Instead, it is maintaining a currency board regime which pegged its currency Lev to euro at a fixed rate.

Hong Kong – Bulgaria Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Bulgaria increased by 36.0% from HK$497 million in 2015 to HK$676 million in 2016. The top three export categories to the Bulgaria were: (1) telecommunications, audio & video equipment (+78.0%), (2) electrical machinery, apparatus & appliances, & parts (+12.4%), and (3) office machines & computers (+20.0%), which represented 84.2% of total exports to Bulgaria.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bulgarian buyers. Currently, the insured buyers in Bulgaria are mainly small and medium sized companies. For 2016, the number of credit limit applications on Bulgaria increased by 5.3%, while the amount of credit limit applications decreased by 35.3%. Insured business increased by 3.1%. Major insured products were electronics, mineral products and electrical appliances, which represented 93.4% of ECIC’s insured business on Bulgaria. The Corporation’s underwriting experience on Bulgaria has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

Please click here to download the charts (PDF format).

 

 

Last update: 29 December 2017

 


 

Key Information

Capital

Ljubljana

Population

2.1 million

Area

20,273 sq km

Currency

Euro (1 EUR = 1.2005 USD as of 9 January 2018)

Official language

Slovene

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 37 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 48 out of 137 in 2017/18 (↑8)

Logistics Performance Index by World Bank

# 50 out of 160 in 2016

Major merchandise exports (% of total, 2016*)

Major merchandise imports (% of total, 2016*)

Machinery & transport equipment (38.9%)

Machinery & transport equipment (35.2%)

Manufactured goods (31.6%)

Manufactured goods (29.3%)

Chemicals (15.6%)

Chemicals (14.2%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

Germany (19.3%)

Germany (16.8%)

Italy (10.4%)

Italy (13.4%)

Austria (7.5%)

Austria (9.9%)

* Most recent year for which data are available

Source: Economist Intelligence Unit

Political Highlights

 

Slovenia gained independence as a parliamentary republic in 1991. The current centre-left coalition government has been in power since 2014. It consists of three parties, including the Modern Centre Party (SMC) led by the prime minister Miro Cerar, the Democratic Party of Slovenian Pensioners (DeSUS) and the Social Democrats (SD). Policy disagreements among these coalition partners have continued, over issues like healthcare reform and privatization. The next parliamentary election is scheduled for summer 2018. Another fragmented result and fractious coalition is likely.

Slovenia was the first former Yugoslav republic to join the European Union (EU). It played a crucial role in the European migrant crisis a few years ago as it was one of the transit countries for refugees from the Middle East. Due to the closure of border for migrants by the Balkan states and the EU-Turkey agreement to send back migrants arriving in Greece from Turkey, the movement of migrants through Slovenia virtually came to a halt in early 2016. Slovenia's relations with Croatia have been strained on account of a border dispute since the break-up of Yugoslavia in the 1990s. Recently, tension with Croatia has escalated after the two countries failed to reach a compromise solution.

Economic Trend

* Estimates ^ Forecasts

Source: Economist Intelligence Unit

Slovenia’s GDP per capita stood at 83% of the EU average in 2016, just behind Czechia out of the east European EU members. As a small, open economy, Slovenia’s economic strength is based on its export sector, which takes up over 80% of GDP. Given that the bulk of Slovenia’s exports go to other EU members, Slovenia was dragged into a deep recession few years ago when the eurozone was suffering from a wave of debt crises, but is now gradually recovering thanks to stronger domestic and external demand.

The Slovenian economy is forecast to expand 3.2% in 2018 mainly driven by private consumption, investment and exports. Thanks to strong economic recovery and fiscal consolidation efforts in previous years, the budget deficit is narrowing and has been within the EU’s threshold of 3% of GDP since 2015. Structural reforms of the corporate and banking sectors as well as privatization of state-owned assets will be part of the reform priorities adopted by the government to move its budget into a surplus in the years ahead.

 

Going forward, it is expected that trade links between Slovenia and its major trade partners in the EU will continue to strengthen. Strong tourism inflows will support the services balance, helping to keep the current account in surplus in coming years. However, the country has a rapidly ageing population, which is expected to significantly increase expenditure on pensions and healthcare. This will become the main impediment to the economic growth and put fiscal sustainability in doubt in the long run.

 

Hong Kong – Slovenia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Slovenia decreased by 0.9% from HK$580 million in 2015 to HK$575 million in 2016. The top three export categories to Slovenia were: (1) electrical machinery, apparatus & appliances, & parts (+4.6%), (2) telecommunications, audio & video equipment (+8.9%), and (3) office machines and computers (+17.8%), which represented 60.0% of total exports to Slovenia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Slovenian buyers. For 2016, the number and the amount of credit limit applications on Slovenia increased by 11.8% and 68.9% respectively, while insured business decreased by 11.2%. Major insured products were chemical products, electronics and electrical appliances, which represented 67.3% of ECIC’s insured business on Slovenia. The Corporation’s underwriting experience on Slovenia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

 

Please click here to download the charts (PDF format).

 

Last update: 29 December 2017



 

Key Information

 

Capital

Rabat

 

Population

35.2 million

 

Area

446,550 sq km

 

Currency

Moroccan dirham (pegged to a basket of euro and USD, 1 MAD = 0.1064 USD as of 28 December 2017)

 

Official language

Arabic, Berber

 

Form of government

Parliamentary constitutional monarchy

 

Ease of doing business by World Bank

# 69 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 71 out of 137 in 2017/18 (1)

 

Logistics Performance Index by World Bank

# 86 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (68.7%)

Manufactured goods (64.2%)

 

Agricultural products (21.0%)

Fuels and mining products (22.5%)

 

Fuels and mining products (10.3%)

Agricultural products (13.0%)

 

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

 

European Union (64.9%)

European Union (55.6%)

 

USA (3.5%)

China (9.1%)

 

India (3.3%)

USA (6.4%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

 

Political Highlights

 

King Mohammed VI in 2011 responded to the spread of pro-democracy movements in the region by implementing a reform program that included a new constitution, under which some powers are extended to parliament and the prime minister but ultimate authority remains in the hands of the monarch. Saad-Eddine El Othmani from the Justice and Development Party was appointed prime minister in March 2017 and a coalition government was formed.

The government’s top priority is to shore up public finances by reducing macroeconomic imbalances. Given the high unemployment rate at around 10% in recent years, authorities will step up efforts to create new jobs and improve the quality of the education system. In the meantime, Morocco is facing threats to social stability, especially from the northern Rif region, where public resentment over perceived corruption and economic inequality has sparked recurring protests since late 2016.  

Morocco was a French protectorate from 1912 to 1956 and Franco-Moroccan relations remain strong. Diplomatic ties with the European Union is expected to come under periodic strain due to disputes over the status of Western Sahara, but they are likely to maintain close cooperation, given Morocco's key role in regional counterterrorism efforts and its position as a departure point for migrants heading to Europe.

Economic Trend

* Estimates ^Forecasts

Source: Economist Intelligence Unit

Morocco has capitalized on its proximity to Europe and relatively low labor costs to attract foreign investment, and benefited from a commitment to economic reforms that encourage the development of private sector. It has a large tourism industry, a growing manufacturing sector, and a nascent aeronautics industry, but economic performance is still sensitive to agriculture, which accounts for around 15% of GDP. Despite government efforts to improve irrigation, agricultural production remains heavily reliant on volatile rainfall.

Following 2016’s drought, economic growth picked up in 2017 and is expected to reach 4.4%, mostly driven by a significant rebound in agricultural activity, while non-agricultural activity remained subdued. For 2018, economic growth is forecast to slow to 3.1%, as weather conditions are likely to be less favorable. Long-term prospect will hinge on continued implementation of reforms regarding labor market efficiency, access to finance, quality of education, and further improvements to the business environment.

The implementation of prudent macroeconomic policies has helped reduce macroeconomic imbalances in recent years. With continued sizable foreign direct investment (FDI) inflows, Morocco’s foreign exchange reserves are expected to remain at a comfortable level of around six months of imports of goods and services.

 

Hong Kong – Morocco Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Morocco increased by 3.5% from HK$819 million in 2015 to HK$847 million in 2016. The top three export categories to Morocco were: (1) telecommunications, audio & video equipment (+13.5%), (2) office machines & computers (-26.2%), and (3) electrical machinery, apparatus & appliances, & parts (+2.5%), which represented 84.7% of total exports to Morocco.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Moroccan buyers. Currently, the insured buyers in Morocco are mainly small and medium sized companies. For 2016, the number and the amount of credit limit applications on Morocco increased by 137.5% and 37.0% respectively, while the insured business decreased by 1.5%. Major insured products were electrical appliances, jewellery and metallic products, which represented 89.3% of ECIC’s insured business on Morocco. The Corporation’s underwriting experience on Morocco has been satisfactory, with no payment difficulty or claim payment case reported during the past 12 months (December 2016 to November 2017).

 

Please click here to download the charts (PDF format).

 

Last update: 28 December 2017


 

Key Information

 

Capital

Zagreb

 

Population

4.2 million

 

Area

56,594 sq km

 

Currency

Croatian Kuna (1 HRK = 0.1583 USD or 0.1326 EUR as of 28 December 2017)

 

Official language

Croatian

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 51 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 74 out of 137 in 2017/18 (no change)

 

Logistics Performance Index by World Bank

# 51 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (65.8%)

Manufactured goods (67.9%)

 

Agricultural products (18.9%)

Fuels and mining products (17.5%)

 

Fuels and mining products (13.9%)

Agricultural products (14.5%)

 

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

 

European Union (66.3%)

European Union (77.2%)

 

Bosnia and Herzegovina (9.2%)

China (3.0%)

 

Serbia (4.8%)

Bosnia and Herzegovina (2.9%)

 

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Following the collapse of the collation government comprising the centre-right Croatian Democratic Union (HDZ) and Most ("Bridge") party in June 2017, the HDZ managed to avoid an early election by forming a new coalition government with the support of several members of parliament from the liberal Croatian People's Party (HNS). The main priority of Prime Minister Andrej Plenkovic's government is to shore up public finances. However, political uncertainty continues to endanger the much-needed economic reform.

Following a decade-long application process, Croatia joined the European Union (EU) in 2013. The government has been striving to raise the country’s competitiveness in the EU market and maximize the opportunities that membership brings, especially the absorption of EU Structural Funds. It will, however, need to deliver reforms urged by the EU in areas such as the labor market, public administration and fiscal consolidation.

Economic Trend

*Estimates ^ Forecasts

Source: Economist Intelligence Unit

 

Croatia is a service-based economy. Tourism is a major economic sector, with its revenues representing around 15% of the country’s GDP. After six years of recession, Croatia returned to economic growth in 2015. In 2017, real GDP grew by an estimated 3.0%, mainly driven by private consumption thanks to tax cuts and increases in minimum and public-sector wages.

Despite sizable fiscal consolidation, Croatia’s macroeconomic stability remains a concern as public and external debt levels are still high. On the positive side, budget deficit has been narrowing which allowed Croatia to exit the EU’s Excessive Deficit Procedure in June 2017.

Although Croatia has a relatively small domestic market and is not particularly well endowed with natural resources, the country's location provides it with several advantages. It is close to important markets such as Germany and Italy, and through its borders with Slovenia, Serbia, as well as Bosnia and Herzegovina, it occupies a strategic position between Western Europe and Eastern Europe.

Hong Kong – Croatia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Croatia increased by 41.3% from HK$262 million in 2015 to HK$370 million in 2016. The top three export categories to Croatia were: (1) telecommunications, audio & video equipment (+116.1%), (2) office machines & computers (+39.7%), and (3) photographic apparatus, equipment and supplies and optical goods; watches (-16.1%), which represented 81.2% of total exports to Croatia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Croatian buyers. The Corporation’s underwriting experience on Croatia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

 

 

Please click here to download the charts (PDF format).

 

Last update: 28 December 2017



Key Information

Capital

Bratislava

Population

5.4 million

Area

49,037 sq km

Currency

Euro (1 EUR = 1.1796 USD as of 19 December 2017)

Official language

Slovak

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 39 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 59 out of 137 in 2017/18 (6)

Logistics Performance Index by World Bank

# 41 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (88.9%)

Manufactured goods (82.2%)

Fuels and mining products (5.8%)

Fuels and mining products (10.8%)

Agricultural products (4.8%)

Agricultural products (6.8%)

Top three export markets (% of total, 2016*)

Top three import markets (% of total, 2016*)

European Union (85.1%)

European Union (58.3%)

USA (2.4%)

China (8.4%)

Russia (2.0%)

South Korea (6.0%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

The Slovak Republic (Slovakia) emerged as a parliamentary republic following the dissolution of Czechoslovakia in 1993. The President is the head of state, while the Prime Minister is the head of government. It has a parliament with 150 members elected for a four-year team by direct universal suffrage.

In the parliamentary election held in 2016, the ruling centre-left Direction-Social Democracy (Smer-SD) won the largest share of the vote but lost its absolute majority. It subsequently formed a coalition government, headed by Prime Minister Robert Fico, with the conservative Slovak National Party (SNS) and the centre-right Bridge-Party of Co-operation (Most-Hid). One of the government's priorities is to combat corruption and improve the quality of the public sector.

Slovakia joined the European Union (EU) in 2004, while tensions with the EU rose following its opposition to the EU’s mandatory refugee relocation scheme. Slovakia once filed a lawsuit against the scheme at the European Court of Justice, but the case was dismissed by the Court in September 2017.

Economic Trend

^ Forecasts

Source: Economist Intelligence Unit

Slovakia is a small and open economy driven by automotive and electronics exports, representing over 80% of its GDP. Taking the advantage of its free access to markets in Western Europe, Slovakia has been successful in bringing foreign investment to the country, especially to its automotive industry. It manufactured more than one million cars each in 2015 and 2016, with most products exported to Germany and the other EU countries.

 

Slovakia’s economy is forecast to grow by 3.7% in 2018, driven by robust domestic demand and strong capital inflows from the EU. The government aims to run a balanced budget by 2020, mainly by increasing revenue through changing tax legislations and fighting tax evasion. A stronger export growth is expected to narrow the current account deficit in 2018.

 

GDP per capita at purchasing power parity in Slovakia was 77% of the EU average in 2016, the second highest among the Visegrad countries (Czechia: 88%, Poland: 69%, Hungary: 67%). On the other hand, there is a decline in the working-age population, raising the dependency ratio and adding pressure on public finances. The shrinking workforce would also push up labour costs, posing a barrier to foreign investment.

 

Hong Kong – Slovakia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Slovakia increased by 22.1% from HK$1,930 million in 2015 to HK$2,357 million in 2016. The top three export categories to Slovakia were: (1) telecommunications, audio & video equipment (+58.0%), (2) electrical machinery, apparatus & appliances, & parts (-7.0%), and (3) office machines & computers (-3.9%), which represented 88.3% of total exports to Slovakia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Slovak buyers. For 2016, the number and amount of credit limit applications on Slovakia decreased by 4.8% and increased by 69.2% respectively, while insured business decreased by 15.2%. Major insured products were metallic products, toys and electronics, which represented 68.0% of ECIC’s insured business on Slovakia. The Corporation’s underwriting experience on Slovakia has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (December 2016 to November 2017).

Please click here to download the charts (PDF format).

 

Last update: 21 December 2017



 

Key Information

Capital

Tirana

Population

2.9 million

Area

28,748 sq km

Currency

Albanian Lek (1 ALL = 0.0089 USD as of 27 November 2017)

Official language(s)

Albanian

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 65 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 75 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 117 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (52.7%)

Manufactured goods (58.6%)

Fuels and mining products (26.5%)

Agricultural products (18.8%)

Agricultural products (10.0%)

Fuels and mining products (11.5%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (77.9%)

European Union (63.2%)

Serbia (8.7%)

China (8.8%)

China (3.1%)

Turkey (7.9%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Albania is a small, mountainous country located in Southeastern Europe. After almost half-century of communist rule, the country transited to a democracy during the 1990s. In the parliamentary elections held in June 2017, the ruling Socialist Party of Albania (SPA) won by securing 74 out of 140 parliamentary seats. A simple majority allowed the party to govern itself without the need for a coalition partner and lifted constraints on Prime Minister Edi Rama, who previously governed in coalition with the Socialist Movement for Integration.

Albania jointed the North Atlantic Treaty Organization (NATO) in 2009 and became an official candidate for European Union (EU) membership in 2014. It reached another milestone in the process of EU integration with the publication, in November 2016, of the European Commission's latest annual report, which recommended to the European Council that accession talks should be opened with the country, conditioned upon implementation of a judicial reform package. Rama has pledged to push the necessary reforms with the aim of starting the talks in December 2017.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Albania’s economy is dominated by agriculture, which employs almost half of the workforce, and services, including tourism. Although it remains one of the least developed countries in Europe with GDP per capita at less than one-third of the EU average, inward foreign direct investment has increased significantly in recent years as the government has embarked on reforms to improve the business climate through simplifying licensing requirements and tax codes. The economy is also benefitting from rising domestic demand, growing tourism, and a recovery in key EU trading partners.

On the other hand, weaknesses in public finances pose a challenge for Albania. The country reached a US$400 million loan agreement with the International Monetary Fund in 2014, aimed at controlling the public debt level. After years of fiscal consolidation efforts, budget deficit narrowed sharply to 1.8% of GDP in 2016 and public debt declined from its peak gradually. However, public debt level remains relatively high.

China is Albania’s major trading partner. According to statistics from Chinese Ministry of Commerce, the bilateral trade volume reached US$636 million in 2016, up 13.9% year on year. With its location strategically positioned at a crossroad between east and west, Albania is one of the important stops on China’s Belt and Road Initiative. In April 2017, both countries agreed to enhance cooperation in areas of infrastructure, production capacity, tourism and agriculture under the framework of Belt and Road Initiative.

Hong Kong – Albania Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Albania decreased by 21.4% from HK$75 million in 2015 to HK$59 million in 2016. The top three export categories to Albania were: (1) telecommunications, audio & video equipment (-40.4%), (2) office machines & computers (-12.3%), and (3) footwear (not applicable), which represented 72.0% of total exports to Albania.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Albanian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis.  In the past 12 months (from November 2016 to October 2017), there was no insured business on Albania.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017



Key Information

Capital

Beirut

Population

6.0 million

Area

10,452 sq km

Currency

Lebanese pound (Pegged to the USD at 1 USD = 1,506.5 LBP)

Official language(s)

Arabic

Form of government

Republic

Ease of doing business by World Bank

# 133 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 105 out of 137 in 2017/18 (4)

Logistics Performance Index by World Bank

# 82 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufacturing goods (37.8%)

Manufacturing goods (51.8%)

Agricultural products (16.8%)

Fuels and mining products (20.3%)

Fuels and mining products (5.2%)

Agricultural products (18.4%)

Top three export markets (% of total, 2014*)

Top three import markets (% of total, 2014*)

Saudi Arabia (11.4%)

European Union (42.7%)

European Union (11.1%)

China (12.1%)

United Arab Emirates (9.7%)

USA (6.0%)

* Most recent year for which data are available

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Lebanon has a long history of civil conflicts involving its competing religious and ethnic factions. These factions include the Maronite Christian minority (about one-fifth of the Lebanese population), who are often in conflict with the Muslim majority. The Muslims are themselves divided between the Sunni Muslim and the Shiite Muslim (each taking up about one quarter of the population).

The civil war ended in 1990 after both Christian and Muslim groups agreed to occupy half of the seats in parliament. The presidency is reserved for a Maronite Christian, the Prime Minister post for a Sunni Muslim and the post of parliament speaker for a Shiite Muslim. However, Lebanon’s political climate remains unstable. The civil war in neighbouring Syria has further divided the Lebanese society along religious lines, with many of Lebanon's Sunni Muslims supporting the rebels in Syria, while many Shiites have supported the Syrian President Bashar al-Assad.

Lebanon will continue to struggle with internal divisions, regional instability, refugee influx from Syria (making up about a quarter of the Lebanese population) and a fragile economy. Meanwhile, a new political crisis was triggered by the shocking resignation of Prime Minister Saad Hariri in early November.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Lebanon is one of the few oil-importing countries in the Middle East. Its economy is primarily based on the services sector, including banking, tourism and financial services; and is reliant on financial support from the Gulf Arab countries. Over the past few years, Lebanon showed weak economic growth amid the long-lasting civil war in Syria and conflicts on national politics.

 

Macroeconomic conditions remain challenging for the country. The influx of refugees from Syria has put heavy pressure on the government’s public finances, which were already weak with large budget and current account deficits, as well as rising public debt. While the level of foreign exchange reserves was sufficient to cover around 20 months of import at the end of July, slowed foreign exchange inflows could put pressures on the reserves.

 

Going forward, an easing of Syria’s war will have a mildly positive effect on Lebanon’s economic growth. Real GDP growth is forecast to accelerate to 1.5% this year with the main driver being services, and tourism in particular. However, the pace of growth in the near term remained uncertain given the domestic political scene and regional instability.

 

Hong Kong – Lebanon Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Lebanon decreased by 19.5% from HK$578 million in 2015 to HK$465 million in 2016. The top three export categories to Lebanon were: (1) clothing & clothing accessories (-8.2%), (2) telecommunications, audio & video equipment (-33.0%), and (3) footwear (-5.4%), which represented 48.5% of total exports to Lebanon.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Lebanese buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Lebanon.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017



Key Information

Capital

Kiev

Population

42.5 million

Area

603,550 sq km

Currency

Ukrainian hryvnia (1 UAH = 0.0372 USD as of 28 November 2017)

Official language

Ukrainian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 76 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 81 out of 137 in 2017/18 (4)

Logistics Performance Index by World Bank

# 80 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Food, beverages & agricultural products (42.0%)

Machinery & equipment (27.7%)

Non-precious metals (22.9%)

Fuel & energy (21.7%)

Machinery & equipment (11.5%)

Chemicals (14.3%)

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

Russia (9.9%)

Russia (12.7%)

Egypt (6.2%)

China (11.6%)

Poland (6.0%)

Germany (10.7%)

Source: Economist Intelligence Unit

 

Political Highlights

 

Ukraine declared independence from the former Soviet Union in 1991 and has since veered between seeking closer integration with Western Europe and being drawn into the orbit of Russia. In 2014, pro-Russian forces annexed the Ukrainian territory of Crimea, after Ukraine's pro-Russian president Viktor Yanukovych scrapped plans to sign a pending Association Agreement with the European Union and was then driven from power by mass protests in Kiev. Crimea, a strategic peninsula jutting into the Black Sea which has a Russian-speaking majority, later voted to join Russia in a referendum that Ukraine and the West deem illegal.

The current pro-Western government is led by Prime Minister Volodymyr Groysman, who is an ally of President Petro Poroshenko. Its policy priorities include restoring the country’s macroeconomic stability and strengthening ties with the European Union (EU). The EU-Ukraine Association Agreement, which aims for closer cooperation in areas such as foreign policy, security, justice, education, science and technology, entered into force on 1 September 2017. Meanwhile, Ukraine seeks to join the North Atlantic Treaty Organization (NATO), the US-led military alliance, and sees it as a security guarantee. President Poroshenko wants to meet NATO entry requirements by 2020 and has promised to hold a referendum on joining.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

During 2014-2015 when Ukraine was wracked by political unrest, the country’s economy contracted by a cumulative 16% due to disruptions of productive and export capacities and significant capital outflows, witnessing sharp currency depreciation, high inflation, dwindling foreign currency reserves as well as ballooning public debts. Under a US$17.5 billion agreement signed with the International Monetary Fund, the government launched a comprehensive set of reforms such as significant fiscal consolidation, moving to a flexible exchange rate, and raising energy prices to market level.

The Ukrainian economy started to recover last year, growing by 2.3%. A budget deficit of 2.2% was comfortably beneath the 3.7% ceiling set by the IMF. The currency also began to stabilize, allowing for a removal of foreign-exchange controls and a build-up in foreign reserves. Inflation has continued to ease, after it reached 48.7% in 2015. In September 2017, Ukraine raised US$3 billion in its first sovereign bond issue since restructuring its debt in 2015, signaling improving investor confidence.

Nevertheless, the overall economic recovery is still weak since it followed a deep contraction. The implementation of some reforms under the IMF programme remains slow, possibly delaying the disbursement of tranches. For instance, inefficient state-owned enterprises still account for a large share of the economy while the agricultural land market remains underdeveloped according to the IMF. Going forward, Ukraine will need to maintain and deepen its reform efforts to achieve sustainable recovery.

 

Hong Kong – Ukraine Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Ukraine increased by 26.6% from HK$906 million in 2015 to HK$1,147 million in 2016. The top three export categories to Ukraine were: (1) telecommunications, audio & video equipment (+41.7%), (2) electrical machinery, apparatus & appliances, & parts (+4.5%), and (3) office machines & computers (+50.5%), which represented 83.3% of total exports to Ukraine.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Ukrainian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Ukraine.

 

 

Please click here to download the charts (PDF format).

 

Last update: 30 November 2017


 

Key Information

Capital

Podgorica

Population

0.63 million

Area

13,812 sq km

Currency

Euro (1 EUR = 1.1902 USD as of 28 November 2017)

Official language

Montenegrin

Form of government

Parliamentary republic

Ease of doing business by World Bank

# 42 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 77 out of 137 in 2017/18 (5)

Logistics Performance Index by World Bank

# 123 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Fuels and mining products (46.2%)

Manufactured goods (60.9%)

Agricultural products (27.5%)

Agricultural products (25.7%)

Manufactured goods (24.9%)

Fuels and mining products (13.3%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (36.6%)

European Union (48.1%)

Serbia (25.6%)

Serbia (22.3%)

Bosnia and Herzegovina (8.3%)

China (9.0%)

* Most recent year for which data are available

Source: World Trade Organization

Political Highlights

 

Montenegro became an independent sovereign state from the former Union of Serbia and Montenegro following a referendum in 2006. It is a small country located on the Balkan Peninsula bordering Croatia, Bosnia and Serbia. Dusko Markovic replaced close ally and the country’s longtime leader Milo Djukanovic as prime minister in November 2016. He has the support of a narrow majority in parliament made up of his Democratic Party of Socialists (DPS) and parties that represent national minorities. The main policy challenges are to shore up the public finances and rein in the large current-account deficit while trying to spur economic growth.

Markovic has continued his predecessor's policy of moving towards further integration with the West. Montenegro began European Union accession talks in 2012 and is making steady progress in the negotiations. In June 2017, it became the 29th member of the North Atlantic Treaty Organization (NATO), a US-led military alliance. However, Russia opposes Montenegro's membership of NATO, claiming that NATO's continued expansion poses a threat to its sphere of influence.

 

Economic Trend

* Estimates

Source: International Monetary Fund

 

Montenegro is a small, open economy which relies on tourism and capital inflows from abroad to stimulate economic growth. Following growth of 2.5% in 2016, real GDP growth is forecast to accelerate to 3% in 2017 on the back of robust consumer demand and the implementation of large investment projects, including the construction of the Bar-Boljare Highway (a three-phase project to connect Montenegro and Serbia).

The implementation of mega infrastructure projects has contributed to high budget deficits and rising government debt. The current account deficit is large due to the rising construction-related imports. In the latest Progress Report on Montenegro, European Commission raised concerns about the country’s macroeconomic stability. Subsequently, the government has embarked on a path of fiscal consolidation, aiming to reduce government debt to 66% of GDP by 2020.

Montenegro adopts the euro as its domestic currency though it is not an official member of the eurozone, and the central bank cannot create currency and liquidity on its own. The euroization of the economy on one hand restricts Montenegro’s monetary authority, but on the other hand helps avoid a sudden stop in capital inflows motivated by fear of devaluation; and makes commercial integration with the European Union easier because it eliminates the transaction costs associated with currency exchange.

 

Hong Kong – Montenegro Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Montenegro increased by 22.6% from HK$45 million in 2015 to HK$55 million in 2016. The top three export categories to Montenegro were: (1) telecommunications, audio & video equipment (+40.6%), (2) tobacco and tobacco manufactures (+100.7%), and (3) photographic apparatus, equipment and supplies and optical goods, nes; watches and clocks (+9.5%), which represented 91.8% of total exports to Montenegro.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Montenegrin buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Montenegro.

 

 

Please click here to download the charts (PDF format).

 

Last update: 29 November 2017

 


Key Information

 

Capital

Sarajevo

 

Population

3.5 million

 

Area

51,197 sq km

 

Currency

Bosnia-Herzegovina Convertible Mark (pegged with euro at 1 EUR = 1.95583 BAM)

 

Official language

Bosnian, Croatian and Serbian

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 86 out of 190 in 2018

 

The Global Competitiveness Index by the World Economic Forum

# 103 out of 137 in 2017/18 (4)

 

Logistics Performance Index by World Bank

# 97 out of 160 in 2016

 

Source: Economist Intelligence Unit

 

Political Highlights

 

Bosnia and Herzegovina (BH) is a country on the Balkan Peninsula. It has three main ethnic groups, which are Bosniaks (Bosnian Muslims), Croats and Serbs. Ethnic divisions have long been posing risks to political stability. With regards to political structure, two separate “entities” exist under a central government: the Bosniak-Croat Federation of Bosnia and Herzegovina (about 51% of the territory), and the Bosnian Serb Republic (about 49% of the territory). They enjoy substantial autonomy, each with its own government, parliament, police and other bodies. This complicated political structure affects governance efficiency. The next general elections both at the central level and at the level of the two entities are due in October 2018.

BH received a North Atlantic Treaty Organization (NATO) Membership Action Plan in 2010 and is an official candidate for NATO membership. On European Union (EU) accession, the country formally requested to join the EU in February 2016. However, due to a highly decentralized government, a lack of consensus among politicians concerning the adoption of reforms required by the EU, as well as inter-ethnic divergences, the process of EU integration will continue to be delayed.

Economic Trend


* Estimates

Source: International Monetary Fund (IMF)

The economy of BH relies heavily on the export of metals, energy, textiles, and furniture as well as on remittances and foreign aids. However, complex government structure and underdeveloped institutions have created significant obstacles to foreign direct investment, and have also hampered economic policy coordination and reform.

In September 2016, the International Monetary Fund approved a three-year EUR 553 million loan agreement to support the country’s economic reform agenda. BH needs to implement a set of reforms, which aims to improve business environment, ease public indebtedness through gradual fiscal consolidation, and safeguard financial sector stability.

Although the economy of BH has maintained moderate economic growth in recent years, the unemployment rate remains high at over 20% and GDP per capita at purchasing power parity was only 31% of the EU average in 2016. Significant progress in implementing structural reforms will be needed if the country is to achieve faster economic growth and create more jobs.


Hong Kong – Bosnia and Herzegovina Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Bosnia and Herzegovina decreased by 16.0% from HK$186 million in 2015 to HK$156 million in 2016. The top three export categories to Bosnia and Herzegovina were: (1) telecommunications, audio & video equipment (-1.0%), (2) office machines & computers (-53.9%), and (3) photographic apparatus, equipment and supplies and optical goods, nes; watches and clocks (-2.3%), which represented 92.8% of total exports to Bosnia and Herzegovina.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Bosnia and Herzegovinan buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Bosnia and Herzegovina.

 

 

Please click here to download the charts (PDF format).

 

Last update: 17 November 2017

 



 

Key Information

Capital

Manila

Population

100.7 million

Area

300,000 sq km

Currency

Philippine peso (1 PHP = 0.0197 USD as of 15 November 2017)

Official language

Filipino and English

Form of government

Presidential republic

Ease of doing business by World Bank

# 113 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 56 out of 137 in 2017/18 (1)

Logistics Performance Index by World Bank

# 71 out of 160 in 2016

Major merchandise exports (% of total, 2016)

Major merchandise imports (% of total, 2016)

Electronic products (50.6%)

Raw materials & intermediate goods (35.4%)

Machinery & transport equipment (7.7%)

Capital goods (31.2%)

Agricultural products (6.5%)

Consumer goods (16.3%)

Top three export countries (% of total, 2016)

Top three import countries (% of total, 2016)

Japan (20.3%)

China (17.8%)

USA (15.1%)

Japan (11.4%)

Hong Kong (11.5%)

USA (8.6%)

Source: Economist Intelligence Unit

Political Highlights

 

The Philippines is a republic with a presidential system. The president, who is limited to a single six-year term, functions as both head of state and head of government. In the 2016 presidential election, Rodrigo Duterte, the long-time mayor of Davao, won a landslide victory. Since coming into office, he presided over a massive crackdown on crime in the country, which draws criticism from human rights groups. He also pledged to make inclusive growth and poverty reduction his priority, as about one-fifths of Filipinos continue to live in poverty, and development in areas outside Manila has been lagging behind.

The Philippines has a diverse population, speaking more than 80 languages and dialects. It has faced separatist movements for decades in the southern Philippines, a region where Muslims make up a majority of the population in contrast to the rest of the country, which is mainly Roman Catholic. The previous Aquino administration and the Moro Islamic Liberation Front (MILF), the country’s largest Muslim rebel group, signed a comprehensive peace agreement in 2014 after four decades of conflict. The deal grants the Mindanao region greater political autonomy in exchange for an end to armed rebellion. However, there are concerns that delays in ratification of key legislation and an emergence of other rebel groups could lead to renewed conflict.

Duterte's foreign policy is distinctly different from his predecessor in that he is more focused on improving ties with China, despite the long-running territorial dispute over the South China Sea, which is a key global trade route and believed to be rich in oil and gas. Meanwhile, the Philippines is expected to maintain close ties with traditional ally the United States. Under a defence pact, the US has troops at five Philippine military bases. The Enhanced Defence Co-operation Agreement (EDCA), signed in 2014, allows the US to deploy ships, aircraft and troops at those bases and to store equipment for humanitarian and maritime operations.

 

Economic Trend

* Estimates ^ Forecast

Source: Economist Intelligence Unit

 

The Philippine economy posted solid growth in recent years, aided by strong domestic demand thanks to increasing urbanization, a growing middle-income class, a large and young population, and substantial remittance inflows from Filipinos working abroad (equal to 10% of GDP). Private consumption, which accounts for more than 70% of GDP, makes the largest contribution to overall economic growth. Business activities are buoyant especially in the services sector including retail, business process outsourcing (BPO), tourism, real estate and financial services. In the near term, real GDP growth is forecast to remain strong, driven by robust domestic demand.

The country has comfortable fiscal and external positions. Thanks to an improving fiscal position in recent years, public debt as a percentage of GDP declined to 42.1% in 2016, the lowest in over a decade. Earnings from BPO and tourism, together with remittances, continued to generate current account surplus. Gross international reserves were equivalent to almost nine months of import cover. Against a backdrop of sound economic fundamentals, the Philippines has earned investment grade ratings from major credit rating agencies.

While the Philippine economy has performed well, the government realized the need to boost the level of investment, primarily in order to upgrade the country’s inadequate infrastructure. Investment to GDP ratio had risen to 25% in 2016 from below 20% five years ago. To raise more revenue to finance infrastructure and human capital investments, the government is pushing for a comprehensive tax reform, aiming at simplifying the tax system and yielding more tax revenue.

 

Hong Kong –Philippines Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to the Philippines decreased by 1.3% from HK$25,741 million in 2015 to HK$25,400 million in 2016. The top three export categories to the Philippines were: (1) office machines & computers (+9.9%), (2) telecommunications, audio & video equipment (-1.6%), and (3) electrical machinery, apparatus & appliances, & parts (-3.7%), which represented 71.4% of total exports to the Philippines.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Philippine buyers. Currently, the insured buyers in the Philippines range from small and medium sized companies to subsidiaries of foreign listed companies. For 2016, the number and the amount of credit limit applications on the Philippines decreased by 24.1% and 24.6% respectively, while the insured business increased by 15.8%. Major insured products were electronics, chemical products and electrical appliances, which represented 65.9% of ECIC’s insured business on the Philippines. The Corporation’s underwriting experience on Philippines has been satisfactory, with no payment difficulty or claim payment case reported during the past 12 months (November 2016 to October 2017).

 

 

Please click here to download the charts (PDF format).

 

Last update: 16 November 2017


Key Information

Capital

Tbilisi

Population

4.0 million

Area

69,700 sq km

Currency

Georgian Lari (1 GEL = 0.3731 USD as of 14 November 2017)

Official language

Georgian

Form of government

Semi-presidential republic

Ease of doing business by World Bank

# 9 out of 190 in 2018

The Global Competitiveness Index by the World Economic Forum

# 67 out of 137 in 2017/18 (8)

Logistics Performance Index by World Bank

# 130 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Manufactured goods (47.7%)

Manufactured goods (64.8%)

Agricultural products (28.4%)

Fuels and mining products (20.0%)

Fuels and mining products (20.8%)

Agricultural products (14.7%)

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

European Union (27.0%)

European Union (30.3%)

Russia (9.8%)

Turkey (18.7%)

Turkey (8.2%)

Russia (9.3%)

* Most recent year for which data are available

Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

 

Georgia is located at the crossroads of Asia and Europe and is crisscrossed by strategically important oil and gas pipelines. Ethnic Georgians form over 80% of total population. Other ethnic groups include Azeris, Armenians and Russians. Since emerging from the collapsing Soviet Union as an independent country in 1991, Georgia has become the arena of conflicting interests. Increasing economic and political influence from the West in the country has long been a source of concern for neighboring Russia. After a short war between the two countries in 2008, a fifth of Georgia’s territory is under the control of pro-Russian separatists.

In the 2016 parliamentary election, pro-Western Georgian Dream-Democratic Georgia (GD-DG), which led the previous ruling coalition, secured a three-quarters majority. Its political dominance helped ensure political stability and policy continuity. Under Prime Minister Giorgi Kvirikashvili, the government is pursuing a policy agenda that focuses on bolstering economic growth. With regards to foreign policy, Georgia will continue to push for closer European integration with an eventual goal of EU membership, as well as North Atlantic Treaty Organization membership, while seeking to improve relations with Russia.

 

Economic Trend

* Estimates

Source: International Monetary Fund (IMF)

Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; tourism; and producing beverages, machinery, and chemicals. It has sizeable hydropower capacity that now provides most of its energy needs. But due to seasonality, the country needs to import electricity during winter months.

Following an economic slowdown in past few years, Georgia’s economy has begun to recover thanks to stronger economic activity in major trading partners. In 2017, economic growth is forecast to accelerate to 4.0%, supported by exports, tourism and investment.

However, the country continues to face some economic challenges including large current account deficits. While the sharp depreciation of lari, which was down roughly 40% against the US dollar over the past five years, helped the economy adjust to external shocks, it also made the country and local businesses more difficult to service their foreign currency-denominated debts. In April 2017, the International Monetary Fund approved a three-year loan arrangement for Georgia that aimed at correcting the macroeconomic imbalances.

Hong Kong – Georgia Trade


Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Georgia decreased by 0.4% from HK$262 million in 2015 to HK$261 million in 2016. The top three export categories to Georgia were: (1) telecommunications, audio & video equipment (-4.1%), (2) office machines & computers (-12.9%), and (3) electrical machinery, apparatus & appliances, & parts (+2.3%), which represented 74.3% of total exports to Georgia.

 

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Georgian buyers with payment terms in Irrevocable Letter of Credit (ILC) and on a case-by-case basis. In the past 12 months (from November 2016 to October 2017), there was no insured business on Georgia.

 

 

Please click here to download the charts (PDF format).

 

Last update: 15 November 2017

 

  

 

Key Information

 

Capital

Prague

 

Population

10.6 million

 

Area

78,867 sq km

 

Currency

Czech koruna (1 CZK = 0.0454 USD or 0.0390 EUR as of 31 October 2017)

 

Official language

Czech

 

Form of government

Parliamentary republic

 

Ease of doing business by World Bank

# 27 out of 190 in 2017 (1)

 

The Global Competitiveness Index by the World Economic Forum

# 31 out of 137 in 2017/18 (no change)

 

Logistics Performance Index by World Bank

# 26 out of 160 in 2016

 

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

 

Manufactured goods (88.4%)

Manufactured goods (82.3%)

 

Agricultural products (6.3%)

Fuels and mining products (10.0%)

 

Fuels and mining products (4.6%)

Agricultural products (7.4%)

 

Top three export markets (% of total, 2016)

Top three import markets (% of total, 2016)

 

European Union (83.7%)

European Union (67.3%)

 

USA (2.2%)

China (12.7%)

 

Russia (1.9%)

South Korea (2.5%)

 

* Most recent year for which data are available

Source: World Trade Organization

 

Political Highlights

 

Czechia is a parliamentary republic. It is one of the most stable and prosperous markets in Central Europe. The President is the head of state while the Prime Minister is the head of government. In the parliamentary elections held in October 2017, ANO, an “anti-establishment” party founded by billionaire tycoon Andrej Babis scored a resounding victory, ending a quarter of a century of political dominance by mainstream parties.

ANO collected a share of almost 30% of the vote, nearly three times that of its closest rival, the centre-right Civic Democratic Party. Two other anti-establishment groups, the Pirate party and the far-right SPD, claimed third and fourth place, respectively. Amid a wave of successes for European populists and the refugee crisis in Europe, the ruling centre-left Social Democrats (CSSD) saw its share of the vote tumble to become the sixth-largest party, even though the election took place against the backdrop of a growing economy which boasted the lowest unemployment rate in the EU.

Drawing on his career in the private sector, Babis portrayed himself as a businessman and pledged to run the country more efficiently like a business. He also pledged to boost investment, fight corruption and keep out refugees. Czechia joined the EU in 2004, but the EU’s mandatory refugee quota system increased Euroscepticism and anti-immigration sentiment in the country. While Babis was sharply critical of the EU’s migrant policies, he said that the country should still stay in the EU.

 

Economic Trend

* Estimates  ^ Forecasts

Source: Economist Intelligence Unit

Czechia has a highly-open economy with exports accounting for roughly 80% of GDP. Emerging as an important gateway to the EU market, it has one of the most skilled workforces and the best infrastructures in the region. It plays an important role in the Germany-Central European supply chain. Manufacturing is a major economic activity, especially with regards to the production of automobiles, machine tools, and engineering products. In recent years, the country has been successful at attracting foreign direct investment (FDI). The Czech economy is forecast to grow by 4.5% in 2017, up from the 2.5% growth in 2016, largely driven by domestic demand with private consumption as a key driver.

Due to strong capital inflows and low inflation, the central bank had previously committed to intervene in the foreign exchange market and prevent a rally in the koruna by keeping the currency close to CZK 27 per euro. Keeping the currency relatively weak helped to push up import prices and fuel inflation. In April 2017, the upper limit on the koruna that had been in place for over three years was finally removed as inflation was back on track. Since then, the koruna has appreciated against the euro by over 4%. On euro accession, the country does not have a target date to adopt the euro, and public support for the euro is low. The manifesto of the ANO stated that the country would not adopt the euro if the eurozone does not carry out significant reforms.

GDP per capita at purchasing power parity in Czechia was 88% of the EU average in 2016, which is high by regional standards, and above the levels in Poland (69%), Hungary (67%) and Slovakia (77%). As an export-oriented country, Czechia will benefit from closer economic integration with the EU and continue to serve as a manufacturing base for the EU. On the other hand, the Czech economy remains sensitive to changes in the economic performance of the EU, which is the destination of over 80% of the country’s exports. In the meantime, the country has an ageing population. The labor force is projected to decline gradually due to demographic factors, thus placing pressures on public finances in the longer-term.

 

Hong Kong –Czechia Trade

Source: Census and Statistics Department of Hong Kong

 

Total exports from Hong Kong to Czechia decreased by 19.2% from HK$6,927 million in 2015 to HK$5,595 million in 2016. The top three export categories to Czechia were: (1) telecommunications, audio & video equipment (-26.9%), (2) electrical machinery, apparatus & appliances, & parts (-13.1%), and (3) office machines & computers (+14.3%), which represented 80.7% of total exports to Czechia.

Source: Census and Statistics Department of Hong Kong

 

ECIC Underwriting Experience

 

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Czech buyers. Currently, the insured buyers in Czechia are mainly small and medium sized companies. For 2016, the number and amount of credit limit applications on Czech Republic decreased by 2.6% and increased by 12.8% respectively, while insured business decreased by 15.2%. Major insured products were electronics, electrical appliances and toys, which represented 76.1% of ECIC’s insured business on Czechia. The Corporation’s underwriting experience on Czechia has been satisfactory, with two claim payment cases of small amount reported during the past 12 months (from October 2016 to September 2017), involving jewellery and electronics.

Please click here to download the charts (PDF format)

 

Last update: 31 October 2017

 



Key Information

Capital

Yerevan

Population

3.0 million

Area

29,743 sq km

Currency

Armenian Dram (1 AMD = 0.0021 USD as of 27 October 2017)

Official language

Armenian

Form of government

Parliamentary democracy

Ease of doing business by World Bank

# 38 out of 190 in 2017 (5)

The Global Competitiveness Index by the World Economic Forum

# 79 out of 137 in 2017/18 (3)

Logistics Performance Index by World Bank

# 141 out of 160 in 2016

Major merchandise exports (% of total, 2015*)

Major merchandise imports (% of total, 2015*)

Fuels and mining products (42.4%)

Manufactured goods (54.2%)

Agricultural products (26.3%)

Fuels and mining products (23.5%)

Manufactured goods (23.5%)

Agricultural products (21.7%)

Top three export markets (% of total, 2016)